AI and IoT define the new India – not outsourcing or ecommerce

This was a breakout week for new age software products out of India. SigTuple became the country’s highest funded healthcare AI startup, with a US$5.8 million series A round from marquee investors – including Uber senior VP Amit Singhal who earlier built Google Search. And one of the largest series A rounds for an industrial IoT startup anywhere in the world went to Bangalore-based Flutura. This too had a smart set of investors with great clout from Singapore and the US.

This is a different India from the one I saw as a reporter back in the eighties and nineties. That India was dubbed the world’s back office because of its legacy of IT services. ‘Bangalored’ was coined to describe outsourcing.

India’s IT giants did put Bangalore on the world stage as a tech hub, and IT services account for 10 percent of the country’s GDP today. But it also has negative connotations.

In IT services, you tend to become order-takers, rather than visionaries.

India got stuck at the lower end of the tech value chain. Droves of engineers were channeled into services for clients abroad instead of building innovative Indian software products. It’s only when they went abroad that the innovative and entrepreneurial side of Indians came to the fore. The world’s biggest software product companies have Indian CEOs – Google, Microsoft, and Adobe. Silicon Valley is teeming with Indian entrepreneurs.

Those who chose to return to India felt frustrated by the lack of a supportive ecosystem for innovation and entrepreneurship. Even the early startups were mostly me-too ones aping similar companies in the West. This, despite the proven quality of Indian tech talent abroad.

See: Why India must fix its obsession with software services and pivot to products

But change is in the air. Engineers from India’s premier tech colleges are choosing to stay back in India. And they want to work for startups or start companies of their own. IT services companies and development centers of multinational companies find it harder to retain those who are innovative and entrepreneurial in spirit.

India has already emerged as a global hub for enterprise software on the cloud. Companies like Zoho and Freshdesk have become leaders in their spaces, winning clients all over the world for their software products made in India.

Chennai is known as the SaaS (software-as-a-service) capital of India, where experienced entrepreneurs are passing on their insights to newbies. The value proposition is compelling: frugal innovation. Top quality software products built locally and delivered over the cloud to global markets at lower price points are hard to beat.

See: How this pioneer built a SaaS hub in Chennai from scratch without VC money

Competing with the best in the world

SigTuple co-founders Apurv Anand, Rohit Kumar Pandey, and Tathagato Rai Dastidar. Photo credit: SigTuple.

Paving the way for others